NEW YORK TIMES

A bipartisan move to cutting benefits programs

By Associated Press

POSTED: 01:30 a.m. HST, Sep 09, 2011

WASHINGTON » In a significant shift driven by bipartisan concern about the looming long-term debt, Republicans and Democrats are no longer fighting over whether to tackle the popular entitlement programs — Medicare, Medicaid and Social Security — but how to do it.

In the presidential race, Gov. Rick Perry of Texas, the Republican front-runner of the moment, took the debate over entitlements to a level never before seen from a major candidate, calling for the end of all three programs as currently structured. In his debate with Republican rivals Wednesday, he amplified his claims that Social Security is a Ponzi scheme and a "monstrous lie" to younger Americans counting on the money for retirement. On Thursday, he circulated similar past criticisms from his chief rival, Mitt Romney, who defended Social Security in the debate.

At the same time, Republicans and Democrats on Capitol Hill expressed a willingness to wring savings from the long-untouchable programs during the first meeting of the special committee that is charged with recommending $1.5 trillion in deficit reductions over the decade. Then President Barack Obama, in his address to a joint session of Congress on spurring job creation, reiterated his call for a plan reducing long-term debt with both changes in entitlement programs and taxes from the wealthy.

It is far from clear whether the comments from Perry, a self-proclaimed provocateur, will give new momentum to or stall early moves between the White House and Congress to deal with the costly benefit programs at the heart of the nation's debt problem. The parties' repositioning on the New Deal and Great Society pillars is leaving both sides on shaky ground and uncertain of where to stand.

Perry's comments could cause the Democrats to dig in against changing the entitlement programs, sensing a political advantage in 2012 — especially if Perry is the nominee.

For all of Perry's bravado, many Republicans are anxious about his stand on entitlement programs, Social Security especially, given their popularity and the disproportionate number of seniors who vote. Even his advisers tried to temper the remarks before Perry made plain he was standing his ground, and some Republican lawmakers Thursday were distancing themselves from his remarks.

Many congressional Republicans remain haunted by the experience of former President George W. Bush's futile effort in 2005 to partly privatize Social Security, which contributed to the party's loss of its House and Senate majorities the next year and convinced congressional Democrats of the power of the issue.

More than half of Americans, 56 percent, would be less likely to vote for a presidential candidate who favored phasing out Social Security so that workers could invest their payroll taxes in the stock market, according to a nationwide poll in June by The Wall Street Journal and NBC News. That included 64 percent of Democrats and 57 percent of independents, whose swing votes decide elections, and even a 45 percent plurality of Republicans. Only one-third of Republicans said they would be more likely to vote for someone who espoused ending Social Security.

Until Perry's recent entry into the Republican contest, the debate over reining in the projected growth of the entitlement programs focused on the health programs, Medicare and Medicaid. Their projected costs, given the aging of the population and fast-rising medical expenses, are greater and growing faster than those for Social Security.

While House Republicans boasted in April of the boldness of their budget — it would turn Medicare into a voucher program for private insurance and Medicaid into a reduced block grant to states — they steered clear of changing Social Security.

Now they have a potential presidential standard-bearer who is taking on Social Security — the so-called third rail of American politics, to be touched at your peril — with both hands.

The collapse of the summer budget negotiations between Obama and the House speaker, John A. Boehner, with their tentative trade-off between savings from entitlement programs and new revenues, left many in both parties convinced that no significant debt-reduction bargain is likely before the 2012 elections. Unless Republicans accept higher taxes on the wealthy, and they swear they will not, Democrats will not support reductions in future entitlement benefits.

Yet both parties are feeling the pressure to act sooner. That reflects not only the seriousness of the nation's looming debt crisis as baby boomers age but also the possibility late this year that, just like in the August fight over raising the debt limit, the financial markets and the economy in general will be shaken by dysfunction in Washington if no plan can be mapped out by the new deficit-reduction committee and enacted by Congress.

The turn in both parties toward tackling the cost of the entitlement programs has been building. In 2010, congressional Democrats approved about $500 billion in future savings from Medicare to help pay for the new health care law, although Republicans attacked them for it in last year's midterm elections. But the onset of the new deficit committee's work and Perry's scathing critique of social spending has added a new dimension.

At the first meeting of the House-Senate committee on deficit reduction, which is to make recommendations by Nov. 23 for a quick up-or-down vote in Congress, several Republicans said that entitlements were the main cause of annual deficits and should be the panel's focus.

"In order to succeed, I know this committee must be primarily about the business of saving and reforming social safety-net programs that are not only failing many beneficiaries, but going broke at the same time," said Rep. Jeb Hensarling, R-Texas, the co-chairman of the committee, which is evenly divided between Republicans and Democrats.

But James E. Clyburn of South Carolina, a House Democratic leader on the panel, said that he was for "smart and compassionate budget cuts" and "ending military adventurism," but that Congress must not shred Social Security, Medicare and Medicaid benefits. Democrats favor reductions in payments to Medicare providers, like doctors and hospitals, and raising the income limits for Social Security payroll taxes so the rich pay more.

Separately, the senior Democrat on the House Ways and Means Committee, Sander M. Levin of Michigan, circulated a memo listing two dozen options that could squeeze more than $500 billion out of Medicare in the next 10 years. Aides to Levin said that he was not endorsing the ideas but helping other Democrats understand the sorts of actions that could be taken.

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